\u3000\u3000 Nanjing Chervon Auto Precision Technology Co.Ltd(603982) (603982)
The company is a high-quality supplier of aluminum alloy precision die castings in China. The company covers the fields of energy, automotive parts and components, automotive transmission systems and new steering systems. At the beginning of its establishment, the company chose differentiated layout and took “technological innovation” and “new energy business” as the breakthrough of development. In recent years, the company’s revenue from transmission system and new energy parts business has recorded high growth.
Clarify the development plan and grasp the recent steady growth and medium – and long-term strategic growth. According to the current business development and the long-term change trend of the industry, the company has formulated five business lines: exit line (traditional internal combustion engine business), growth bottom line (valve sector and other core products), growth line (new energy vehicle parts business), explosion line (component business) and skyline (hub motor system and digital suspension system). According to the development plan, the transmission parts business and new energy parts business of the company will benefit from the rapid development of the new energy industry and maintain high growth in recent 2-3 years. In addition, the field of integrated die casting is also the focus of the company’s R & D investment.
With the rapid development of the new energy market, the company has been working in this field for several years and has a first mover advantage over its friends. With the rapid development of the new energy industry, the relevant aluminum die casting products for electric vehicles are still in the process of upgrading, providing more opportunities for Chinese suppliers who have accumulated in this field for many years. In 2013, the company cooperated with Siemens to develop electric drive related businesses. Its first mover advantages are mainly reflected in: (1) it has nearly 10 years of experience in R & D and mass production of new energy products; (2) It has a deep foundation for cooperation with internationally renowned Tier1 in new energy products, endorsing the company’s ability to obtain new orders. The company has planned the capacity construction of new energy products in Ma’anshan, Nanjing and Hungary. It is estimated that the new energy output value of Ma’anshan factory will be 430 million and that of Nanjing new energy production base will be 520 million.
Grasp the development opportunity of DCT layout by independent vehicle enterprises, and the transmission business with DCT related products as the core of the company will benefit. DCT is the mainstream solution in China’s transmission market at present, with low fuel consumption and compatibility with hybrid models. Several mainstream independent car companies have layout in DCT and achieved mass production. The company’s transmission products are not only supplied to great wall, SAIC, FAW and Chang’an, but also obtained direct supply orders from Byd Company Limited(002594) , great wall, Chang’an and other automobile enterprises, which is highly recognized by the market. With the release of IPO capacity, it will help the growth of the company’s transmission business.
Accelerate the integrated die casting of layout and open up new space for development. As new energy vehicles have a higher demand for lightweight than traditional fuel vehicles, integrated design, body structural parts, three electric system shell, chassis parts and other integrated die-casting solutions are becoming a new track for industry innovation. The company has earlier arranged integrated die-casting, and large die-casting machines will be mainly used for “multi in one” components, battery components and body components. According to the announcement information, the company’s 5000t die-casting machine has been put into use and mass production, and 6000t and 8000t die-casting machines will also come to the factory one after another.
Profit forecast and investment rating: at present, the automotive industry is in the transformation stage of rapid development to electrification and intelligence, and relevant parts are still upgrading and changing, which puts forward higher requirements for suppliers’ technology R & D and synchronous development ability. The penetration rate of new energy vehicles has increased rapidly. We are optimistic about the company’s market competitiveness and capacity layout in new energy, transmission parts and other core businesses, and the company can grow in the future. We estimate that the net profit attributable to the parent company from 2021 to 2023 will be 162 million yuan, 247 million yuan and 334 million yuan respectively, and the corresponding EPS will be 0.81, 1.23 and 1.66 yuan respectively. The closing price on February 15, 2022 corresponds to the PE value from 2021 to 2023, which is 37, 24 and 18 times respectively. “Strongly recommended” rating for the first coverage.
Risk warning: the sales volume of passenger cars is lower than expected; Price rise of upstream raw materials; The recovery of missing core is not as expected; The construction progress of new production capacity is less than expected.
